zondag 18 december 2011

Best-selling author completes first global equity-based Crowdfunding campaign via Symbid

Utrecht, 12/19/2011 – Martijn Arets, author of the book "Brand Expedition, a 5-­‐month journey visiting Europe's most inspiring brands", has collected € 20,000 in investments from the general public, via investment platform Symbid. The investments will be used to translate the successful Dutch version of the book in English and bring it on the international market. Arets used Symbid's investment platform to reach the general public. Special about this transaction is that all investor actually become shareholders in the company of Arets.

Arets needed 2 months to reach his capital goal. In total, 171 investors, domestic and foreign, responded to the call. The English translation of the book is expected in February 2012 and will be available on the website (as EBook or hardcopy) of the author and via regular channels. The translation will gain familiarity with a unique promotional action, in which 1000 fans from 15 countries read a chapter from the book in front of the webcam making it the first read out loud book in the world on YouTube. Arets is very pleased with the result: "The past two months I have not only gained the necessary investment, but also an additional chapter to the story, overwhelming media attention and 171 Brand Expedition ambassadors.“

The investment platform Symbid demonstrates with this transaction that its approach to finance entrepreneurs and businesses works, says CEO, Korstiaan Zandvliet. "With this first successful financing, we proved that the platform works! We would therefore like to congratulate Martijn and all investors with this fantastic result."

About Symbid
Symbid is the first investment platform where investors can directly invest from as little as € 20,-­‐ in the equity of start-­‐ups or existing businesses. Any entrepreneur is able to achieve growth or to raise capital via Symbid. Symbid recently reached the finals of the Shell Live Wire Award and is among the most innovative companies in the Netherlands.

About Martijn Arets and Brand Expedition
From Brand Expedition Martijn advises and inspires people and organisations in the areas of brand, strategy, entrepreneurship, innovation, new business models and social media. He does this through presentations, brainstorming sessions and consultancy. His book Brand Expedition was recently nominated by Sprout for the title of ABN AMRO Business Book of the Year.
For more information
www.symbid.com www.brand-­‐expedition.eu 


woensdag 23 november 2011


After a successful debut in Argentina and Chile, IDEAME lands in Mexico
Mexico, November 23, 2011 – IDEAME (www.idea.me) launches its platform for the  Mexican market becoming the first crowdfunding platform operating across different countries in Latin America.

IDEAME is a Latin American crowdfunding company for creative and artistic talent in the region. The fundamental goal of IDEAME is to provide financial support for creative and artistic Latin American talent in all their expressions turning their ideas into reality on a global stage. “Our platform seeks to secure financing for creative projects in Latin America in a variety of areas, including music, cinema, visual arts, design, fashion, innovation and technology. Since our launch in August, we have seen several projects that successfully reached their funding goals in Argentina and Chile. It is a very positive sign for the rest of the region.” highlights Sebastian Uchitel, CEO of IDEAME.

“The landing of our platform into Mexico is part of our strategy to become the main regional player in Latin America. Mexico presents an amazing talent pool. Besides, social networking and electronic commerce have grown significantly over the last years within the country”.
How it Works?
The mechanism is simple: the "creator" of a project presents his initiative with the economic objective needed to raise and pursue it, within a specified period. The public works financially in exchange for various prizes, rewards or experiences depending on the amount of collaboration. If the project meets the economic objective within the stipulated period, the creator gets the funding for the project, develops, and delivers the promised rewards. Failure to achieve its economic goal, the money is returned to those who contributed.

Who trust us?

The company has secured the support of a group of investors of notable prestige with a solid track record in online and creative throughout the region. “Among the investors are Eduardo Costantini Jr. (who served as executive director of the MALBA Museum for five years, cofounder of MUBI and president of Costa Films), Boris Hirmas Said (vice chairman of Yellow Pepper and a member of the Latin American Committee of the Tate Museum in London) and Wenceslao Casares (founder of Patagon and Bling Nation), just to name a few of the most prominent investors,” added Mariano Suarez Battan, the renowned entrepreneur who sold his company Three Melons to Playdom/Disney in 2010 and one of the cofounders of IDEAME.“There is an extraordinary pool of creative and innovative talent in Latin America which faces obstacles to find funding. IDEAME will fill that void by providing the necessary resources for those artists to turn their dreams into reality, and we think it’s a great initiative,” said Boris Hirmas Said, Vice-Chairman of IDEAME.


The fundamental goal of IDEAME is to provide financial support for creative and artistic Latin American talent in all their expressions turning their ideas into reality on a global stage. IDEAME allows creators and artists to share their ideas with an online community, providing those members with the opportunity to take an active role in the development and execution of various projects and initiatives all on one platform. For more information, visit www.idea.me or send an e-mail to prensa@idea.me

woensdag 26 oktober 2011

Edit Huddle: The Crowd as Editor

By Rachel Hyman, head of marketing at Edit Huddle

Blog Errors are a Problem

Think about your favorite blogs, whether they’re political, tech, or news blogs. If they publish frequently, chances are their posts have errors — something is misspelled, the grammar is wonky, or there’s a broken link. Even at blogs with attentive editors, mistakes slip through. Thing is, even if you’re not an out-and-out grammar Nazi, those irritating errors suck. They’re distracting. They make the blogger and the blog look bad, and they attract a flood of commenters who seem to thrive on pointing out errors, detracting from more substantial conversation.
Bloggers, rightfully, are more focused on generating and disseminating quality content than they are on catching every single trivial error. Blog readers want to read clear, error-free posts and the grand majority of them look to the comment section for something more meaningful than “You spelled ‘accidentally’ wrong. Again.” So what’s the solution?

That’s where Edit Huddle comes in. Edit Huddle is a tool that lets blog readers flag particular errors, sending that information to bloggers via a clean dashboard. The tool seamlessly integrates with blogs, allowing authors to fix their posts directly from the dashboard. The tool itself is simple and unobtrusive for blog readers to use: they simply highlight the section of text that contains the error, select the type of mistake it is, and the information is sent directly to the blogger.
Why use Edit Huddle?

Everyone on the Edit Huddle team is a huge blog reader, and we all get frustrated over errors, especially when the comment section gets inundated with people more concerned with pointing out mistakes than with having a productive discussion. Our founder, Imran Ahmad, noticed that many commenters on his favorite blogs were highlighting the same errors, but that there was no easy way to directly contact the blogger. Unsatisfied with the idea of sticking his correction in the comment section and calling it a day, Imran realized that he could harness the power of the crowd to make corrections, improving the blog experience for readers and writers alike.

We believe that there’s a large market of blog readers who would avail themselves of the Edit Huddle tool — much larger than self-proclaimed grammar Nazis who take to the comment section upon spotting errors. See, for instance, this comment from a recent Thought Catalog article:

Thought Catalog posts about 65 times a week. That’s a lot. They also don’t have a stringent editing process, and typos crop up all the time. See the reply by ‘Guest’ up there? 18 people agreed with that commenter. Those are all people who have picked up on the fact that Thought Catalog has recurrent errors, and they’re all potentially people who would use the Edit Huddle tool, even if they wouldn’t comment like Max did.

The crowd is so essential to Edit Huddle because they, the blog readers, are the ones spotting the errors and flagging them to be sent to the blogger. Edit Huddle is literally unimaginable without the scores of readers — the silent majority — who want to read high-quality, professional content and are engaged enough with the blogs they visit to conceivably submit corrections. 

As we move the startup along, we consider not only the bloggers who would put the tool on their site, but also the blog readers whose corrections are paramount to the success of Edit Huddle. We always keep in mind that even if we pitch Edit Huddle to bloggers, the blog readers are our users as well. The feedback of these blog readers has already been incredibly useful. For instance, we’ve been playing around with where on a blog post to put the “Corrections” button that enables users to submit errors, according to the different comments we’ve gotten. Because the crowd is the one submitting the errors, we’re intent on making the process as simple and nonintrusive for them as possible.

History + Progress

Edit Huddle was conceived at the Chicago SocialDevCamp Hackathon. We were one of the winners at that competition, which only pushed us to work harder. We soon competed in Chicago Startup Weekend and gained some incredible traction in an intense 54 hours. We contacted over 1,200 bloggers and got a 17% response rate. We found that 85% of survey respondents would use the Edit Huddle Tool, and 40% would pay $1.99 for it. We also got nince influential bloggers to agree to beta testing, which means the Edit Huddle tool will first be rolled out in front of a total 80,000 readers. “This is something we would definitely use on our website,” said Seth Kravitz, co-founder of the Chicago entrepreneurial site Technori. “I love the simplicity of your implementation." After buckling down for two and a half days, we were declared one of the winners at Chicago Startup Weekend.

Since Startup Weekend, we’ve been working around the clock to ensure the success of Edit Huddle. Right now, we’re focusing on a Wordpress plugin, and we plan to extend seamless integration to a multitude of other blog platforms. We’ve also been connecting to Chicago entrepreneurs, readying beta testing, and launching our new website. Beta testing will start shortly; expect to hear about a full launch soon.

Get in Touch

Please check out our new website and sign up for an invite. You can also connect with us on Facebook and Twitter. We love hearing from people who are into startups, entrepreneurship, technology, crowdsourcing, and above all bloggers and blog readers! Email press@edithuddle.com to get in touch.

dinsdag 4 oktober 2011

PR: "Brand Expedition goes to stock market"

“English edition will conquer the world”

Utrecht – In order to translate his successful book 'Brand Expedition, an expedition to Europe's most inspiring brands', Martijn Arets will, in the next 8 weeks, use crowdfunding in order to sell 1000 stocks of his book.

Last Monday, he used an old cargo bike to visit the place where the big boys play – or rather, sell their own stocks: Beursplein 5 in Amsterdam, near the Beurs van Berlage. Using a fun guerilla action, he created attention for his own shares. Investors, besides the standard share of 20% of the book- project, will get free books, access to exclusive presentations and Skype advice sessions of brand consultant Arets.

In 2010, Arets travelled across Europe in a old Volkswagen T2 camper van and interviewed the CEO's, founders and brand executives of 20 authentic European brands. He captured his experiences in the book Brand Expedition. In order to finance the translation and production, together with Symbid he initiated this crowdfunding campaign.

Arets: “Banks generally aren't in tune with what you do as an entrepreneur. The pro of crowdfunding is that shareholders become immediate ambassadors of your project. Because they share in the profits they're very motived to activate their own network. Investing is possible from €20 and after 7000 sold books after taxes, a break-even of their input is accomplished. In order to sustain the shareholders' interest in the long run, they automatically get a share of 10% in any of the following translations. Currently a Chinese translation is in consideration”.

45 million fans
To immediately put his English translation in the spotlights worldwide, Arets will challenge the fans of the visited brands (45 million on Facebook alone) to read a chapter about 'their' brand in front of a webcam. They will participate in the first online video book ever. Arets hopes that this action connects at least 1000 brand fans and will globally position his story.

Arets proved last year that he has a keen insight in how to use social media to create attention about his expedition and his book: he gathered nearly €1 million of free publicity. One example is a video he made with a secret camera where he, in different bookshops, bought his own books before they were actually on sale. The attention this video got on Twitter and other social media outlets, made sure that his book within a couple of days after the release was available in several bookshops.

Note for the editors: Martijn Arets is available for interviews and press photo's in high resolution are available through request. For more questions please contact him at: martijn@brand-expedition.eu.

- Youtube channel with video of e.g. ‘stockmarket’, ‘bookstore guerrilla’ and booktrailer
- Flickr channel Brand Expedition with lowres pictures and press photo's

vrijdag 2 september 2011

Beans, recession and crowdfunding

Tired with the City life, constantly surrounded by talk of the "double-dip recession", broke unable even to buy a card for their mother's birthday, and with daily intakes of cheese-on-toast at new all time highs, James Bailey and Tarkan Ahmet decided that the only thing to do, was to 'go it alone'. Armed with a box of highlighters and a MacBook, they went about turning their idea of crowdfunding into reality....6 months on, 223 tins of baked beans down and www.PleaseFund.Us is live.

"PleaseFund.Us is an exciting British startup that will harness social networks and viral marketing to raise money for creative projects in a time when funding for the arts has been drastically cut. We are building an online community that are looking to support new and innovative ideas through a pledge system of financial backing." source: James Bailey - www.PleaseFund.Us Founder.

Creative ideas can be showcased on PleaseFund.Us to a community that is passionate about funding exciting new projects, as well as looking for exclusive and unique pledge rewards. Since its launch on 20th August this year, PleaseFund.Us already has over 4000 followers on Twitter, 1000 likes on facebook, and is already supporting several exciting and innovative projects.

The official launch party is at Cargo nightclub in Shoreditch, London on Wednesday 7th September, starting from 7pm. This marks one of the founder's birthdays and provides an opportunity to network, meet the Community, share a drink with the PleaseFund.Us team and hear 'Enfant' perform some of their new DJ material live.

Twitter: @PleaseFundUs
Facebook: /PleaseFund.Us
Website: www.PleaseFund.Us
E-mail: Hi@PleaseFund.Us

donderdag 25 augustus 2011

$13k in the first 24 hours

Man-child is an independent feature film that explores sports, education, religion, and sex in America through the eyes of a talented 13 year-old basketball player.

The film is the first feature by Koo, who co-wrote, directed, shot and edited the Webby Award-winning web series The West Side. He also runs the independent filmmaking web site NoFilmSchool. The campaign is using a $1-per-frame format on Kickstarter, where every dollar pledged equals one unique frame of the finished film. The script for Man-child was also accepted to IFP's Emerging Narrative Program.

In 2009, the NCAA lowered the age limit on who can be considered an official basketball "prospect" to include 7th graders. While there have been a number of basketball films made about high school, college, or pro athletes, today's recruiting -- legal and illegal -- begins much earlier. It's a fascinating and treacherous world which often leaves big decisions in the hands of little kids.


dinsdag 23 augustus 2011

Sometimes even we are touched by a Crowdfunding project

Vocalist Muriel Louveau and composer Charles Kim produced the CD Skana entirely in cyber space. The concept of staging Skana as a mixed journey with compatible artists who follow the same cyber creative process came as a natural consequence. We are invited to create a live theatrical version joined by dancer Emily Pope Blackman and conceive Skana, Goddesses and More as a co bill event with composer Milica Paranosic. The show is scheduled on 9/27 in NY at Galapagos Art Space. We need financial support to cover the production costs for rehearsals, equipment rental & artist fees. This campaign is vital to launch our
project. This is the first step towards a future multimedia show we aim to develop.

If you want to support this project, click here

donderdag 14 juli 2011


In Latin America, there is an extraordinary pool of creative and innovative talent that faces obstacles to find funding. Some of these ideas could become products, works of art, or experiences that could change the world.
IDEAME.com is an online community that helps remarkable Latin American creators make their ideas happen and expand internationally through the power of crowdfunding, social media and value added services.
Our fundamental goal is to provide financial support for creative and artistic Latin American talent in in a variety of areas, including music, cinema, visual arts, design, fashion, innovation and technology.

The crowdfunding phenomenon is booming in developed economies as a natural evolution of social media. We are adapting those successful models on a global level to meet the needs of artists and creative talent in Latin America.

We are planning to launch the platform in August 2011. The market rollout will initiate in Argentina and Chile and later on expand to other Latin American markets, including Mexico, Colombia and Brazil.

We’ ll keep you posted with our updates!
Let’s support LatinAmerican talent at IDEAME.com!
Sebastián Uchitel, CEO IDEAME.com


zondag 26 juni 2011


As you may have noticed, I’ve been into the CROWDFUNDING subject quite a bit lately, and have, among other things, supported filmmakers to raise funds for their film projects that way. 
At the moment I am collaborating with the Berlin based director/producer Claudia Rorarius to organise and promote the theatrical and DVD release of her Film CHI L’HA VISTO – WHO SAW HIM
The story follows its protagonist, Gianni Meurer, on a trip from Berlin to Italy. There, Gianni, a man in his early thirties, wants to search for his father, whom he has last seen 25 years ago. Aside from faded childhood memories, all Gianni has left from his father are a few letters and a photo. Gianni shows this photo to everyone he meets on his way to Rome, because that is where he believes his father to be.
In August 2011, CHI L’HA VISTO – WHO SAW HIM will premiere in German cinemas and inspire many people, notably indie-filmmakers, road movie- and drama enthusiasts, friends of the Italian Cinema, people in search of their true identity, homosexuals and lesbians or people with bi-national background. 
Subsequent to it’s German theatrical premiere the film is to be released for international audiences and will be marketed internationally via DVD and download. 
For this last tour de force we are still lacking the necessary change. Therefore we have launched a crowdfunding campaign on startnext for our German speaking fans. Additionally, for our audiences outside Germany, we are running an international campaign on IndieGoGo.
We need to raise a total of about EUR 15.000 to be able to produce the necessary film copies, create subtitles, produce various promotional materials (posters, postcards, trailers, etc.), record audio comments, author the DVD and to organise press screenings etc.
If you are able to support this project, please click on the widget below or spread this article among your friends on facebook and twitter or via email. For your financial support we offer some nice perks, such as a personalised „Thank-You“-video from our leading actor Gianni Meurer, a signed film poster, a DVD, an invitation to the opening night or even a dinner with the director.
Feel free to follow CHI L’HA VISTO – WHO SAW HIM on Facebook or stay up-to-date viaTwitter. In a few days there also will be a blog online, where you can find all the news about the theatrical release and the funding.
Until then, all that’s left for me to do is to show you the video to our crowdfunding campaign (including a trailer):

Payoff: This guestpost is a translation of the original german text "CHI L'HA VISTO in die Kinos bringen!" by Wolfgang Gumpelmaier, translated by Spoxx.

maandag 20 juni 2011

Global Strategic Management Institute Presents Startup Competition, VentureEngine, at Enterprise Tomorrow Conference

A competition geared for companies and products focused on
innovative enterprise software and technologies

San Francisco, CA: GSMI announced today the launch of their first ever start up contest VentureEngine, which will be geared towards startups in the enterprise software and technologies market within the following 5 themes; Collaboration, Social Communications, Crowdsourcing, Enterprise Mobility and Gamification. The competition is part of the Enterprise Tomorrow Conferencebbeing held in San Francisco on September 13-15th, and will give the 7 chosen finalists the opportunity to present their idea in front of a panel of investors and VC’s in order to win the cash grand prize.

The VentureEngine Startup Competition offers a unique opportunity to those selected and unlike other launch events, there is no application fee. The VentureEngine Competition will highlight emerging companies by throwing them in front of our panel of industry experts and investors to judge their groundbreaking technologies, products and services. Each finalist will then have 5 minutes to pitch their idea followed by two minutes of Q and A and panelist feedback. Only seven of the most innovative and disruptive companies will make the cut, and only two will win. A cash prize will be awarded to both the judge’s pick and the audience’s favorite presentation. If selected, finalists will receive:

o Opportunity to pitch publicly to investors, corporate buyers and the media
o Two free passes to the event
o Highlighted exposure
o Listed in event material, social media marketing and press releases
o 30in Exhibitor table top with internet access and space for a sign
o Chance to win cash grand prize and fan favorite prize! 888.409.4418

Startups that would like to be considered for VentureEngine, please visit www.ventureenginestartup.com, fill out the application form and wait patiently to be contacted about your entry. The VentureEngine Startup Competition will debut at the Enterprise Tomorrow Conference and Exhibition in San Francisco, CA on September 13-15 2011. For more information on VentureEngine and the Enterprise Tomorrow conference please visit us online at www.enterprisetomorrow.com or call 888.40-.4418 ext. 10.

Companies must launch a working version of product at VentureEngine (companies presenting products that have been released for more than 6 months will not be accepted), must be at the startup phase and received Angel, Series A funding or less to be eligible. Visit ventureenginestartup.com for more information regarding eligibility.

About GSMI:
GSMI is dedicated to creating rich environments for learning, networking and ensuring their attendees have great experiences. GSMI hosts dozens of summits, around the world, each year. They are leaders in their industry and strive to always provide the best, most relevant speakers, quality workshops and the right environment to both network and learn.


vrijdag 27 mei 2011

Help out a Crowdfunding researcher

To all Crowdfunding Platform Owners/Employees

As a master student of the University of Amsterdam I would like to ask you to participate in
this research on Crowdfunding. As you will know Crowdfunding has become a phenomenon
of high interest the last couple of years. Academic research on this topic is very scare to non-

With this research I would like to get a better insight in the concept Crowdfunding. Although
there is a definition, I would like to find out whether one can observe particular streams of
crowdfunding. The results of the research will hopefully lead to generalizations about this
concept that are academically sound.

The questionnaire will be treated completely anonymous and is for research purpose only. It
will take you no longer than 5 minutes to complete.

The link to the research is: http://www.thesistools.com/web/?id=196620

If you are interested in the results of the research please let me know via:
or find me on twitter: http://twitter.com/Thesiscrowdfund

Kind regards,

Frank ter Kuile


woensdag 11 mei 2011

Dutch Equity Based Crowdfunding platform presents Exclusivi

The recently launched Equity-based Crowdfunding platform www.mkbcrowdfunding.nl features some of its latest proposition via www.crowdsourcing.org. The platform uses the innovative construction developed by the Dutch company Symbid. One of the selected propositions is Exclusivi. The idea for Exclusivi was developed by Anthony Carter.

Exclusivi is a new mobile application which shows you in your favorite shopping area any special offers that are exclusive to members only. So how does this concept exactly work which is unique in the Netherlands? First you download the free application from www.exclusivi.nl to your Smartphone. Once the application is running, you'll see a list of special deals in your neighborhood. Such a deal could be for example a free pair of Levi's jeans when you walk into a specific clothing store as one of the first one hundred customers. The application will display a promotion code that you show to the cashier. The coolest feature is that the application can also notify you automatically of any special offers in your area. This way you do not have to open the application and go through the list of deals every time. Isn’t this easy! Partners can publish their deals for free. The application is soon available on multiple platforms.
Also check this guerilla marketing video made by Anthony:

Link to pitch

The Crowd can use www.mkbcrowdfunding.nl for investing in Exclusivi’s Equity. For more information about Exclusivi check their Crowdfunding page or their website.  


vrijdag 4 februari 2011

The Crowdfunder – an “AdVenture Capitalist”

Last week’s blogpost “Equity or Debt?” the Next step in Crowdfunding highlighted the three fundamental forms of crowdfunding platforms:

1.       Crowdfunding as a method for sponsorship with a non-financial return

2.       Debt-crowdfunding with a financial return (P2P-lending)
3.       Equity based crowdfunding with a potential financial return and ownership
Whether you are a crowdfunder, an adVenture Capitalist, or if you have an initiative or you are an entrepreneur looking to raise money, it’s critical to have a good understanding of the models and the different types of initiatives they can support.

If you take a close look at the burgeoning marketplace for crowdfunding platforms, explosive growth in the number of platforms that provide crowdfunding solutions is being seen in the sector for “softer projects”. These can include “good causes”, “non-profit ventures” or “commercial projects” that don’t offer a commercial return to the contributors who put forward funding. In my post “Equity or Debt; the Next Step in Crowdfunding”, I referred to this category as “Crowdfunding as a method for sponsorship with a non-financial return”. Based upon donations and sponsoring from the crowd these platforms are gaining in popularity fast. Sometimes with a focus on a particular field such as movies, books and art projects among others. Probably the most well known platforms in this category are: www.kickstarter.com, www.indiegogo.com and www.sellaband.com. Let’s take a look at them: 

If you’re looking for startup funding for a creative initiative, Kickstarter is a crowdfunding platform that allows just about anyone with a unique idea to share a potential project with the site’s 1 million online viewers. People that recognize the project’s potential have the opportunity to “pledge” money to make it happen. On Kickstarter, a project must reach its funding goal before time runs out or no money changes hands. Under the Kickstarter model, project creators keep 100% ownership and control over their work by offering products and experiences that are unique to each project. In 2010, more than $27 million was pledged through Kickstater and 3,910 projects were funded by the crowd. 

[Image source: www.kickstarter.com]

Sellaband is a platform that raises money for artists to help them launch their music careers by crowdfunding donations from fans. Music fans can search for talent, view the charts and listen to some songs and start discovering new music. Fans can support their favorite artists by buying a “part” (a unit that represents a level of interest in a project) and helping them to raise the funds for a new music project such as a new album, tour or the promotion of their music.

At all times before the Fund raising goal has been reached fans can withdraw their money from a Music Project and move it to another project. Once an artist has reached his/her goal the doors are closed, meaning that no new Believers can come on board and the contributors’ can no longer withdraw their money. The artist will use the funds raised to complete his/her Music Project. Believers’ “parts” translate into rewards in the form of free downloads and other goodies artists might offer like exclusive CDs, t-shirts, free lunches, etc. or even a cut of their revenues.

[Image source: www.sellaband.com]

On Indegogo, individuals can create a funding campaign to raise money quickly and securely for something they are passionate about? By leveraging their individual networks as well as Indigogo’s network, the can reach potential contributors globally. To date, Indegogo has helped to raise millions of dollars for over 15,000 campaigns, across 155 countries.

The model works by offering contributors unique perks or tax deductions in lieu of offering profit while the campaigner always keeps 100% ownership of their project or venture. Indegogo will feature selected campaigns on its Home Page and promote the initiate through the press and via social media.

[Image source: www.indiegogo.com]

The second category mentioned in my latest post referred to Debt-Crowdfunding platforms also known as the act of “Debt-Crowdfunding with a financial return (P2P-lending)”.  These platforms offer the crowd an opportunity to invest in debt for start-ups or entrepreneurs. The most well known example in this category is www.kiva.org who to date has initiated loans of over US $190m.

[Image source: www.kiva.org]

Kiva's mission is to connect people, through lending, for the sake of alleviating poverty. With Kiva you loan money to contribute to the funding of a loan, typically to an individual or small entity in a 3rd world country, in return for the repayment of the loan with interest. Money is received through the Kiva platform and transferred to a micro-financing institution (MFI) close to the beneficiary. Once the required loan amount has been reached, the loan is initiated and payments with interest are returned through the MFI to Kiva. Once the loan has been repaid, individuals can withdraw their money or make a new loan to another worthy cause.

Typically Kiva and other such platforms operate under the philosophy that good-natured individuals will help others given the opportunity to do so in a transparent, accountable way. The poor are highly motivated and can be very successful when given an opportunity and loans encourage more accountability than donations where repayment is not expected.

One challenge for such platforms is their need to offer an efficient capital movement but by using third party organization to collect the interest payments. While it would seem that the nature of the loans are or particular high-risk to the lender, Kiva reports a current repayment rate of nearly 99%. Additionally, due to the nature of the loans and the typical demographic of the recipient, the cost of capital is also considerably higher than for examples bank loans. When bringing in the social element (i.e. investing in third world entrepreneurs), the model still withholds value for the movement in capital but is not optimal for lenders whose motivations do not include philanthropic motivations. 

 A transit category between Debt Crowdfunding and Equity-based Crowdfunding is revenue share Crowdfunding. In this form the entrepreneur offers a percentage of the Revenue to be distributed among the investors. This model suffers from the some of the same characteristics as Debt-Crowdfunding – the borrower commits themselves to high interest rates and therefore extreme financial pressure from the start.  Although many argue that this model is fair towards investors and entrepreneurs, as the cost are only incurred when the organizations is making a turnover. Fact remains that it has the potential to encumber the organizations with excessive burden in its ability to make future investments, making the firm a cash-cow for investors but increasing the odds that the enterprise is less likely to survive. 

There is also the potential for a revenue share model to potentially disadvantage the investor. Consider Goldman’s recent Facebook-deal. If Facebook was crowdfunded from the start in a revenue share-model, the investors would only have a claim on Facebook’s turnover (aprox. 800 million in 2009) and not on the recent valuation of 50 billion which would otherwise be the case if an equity-based model was used.

The third category mentioned in my latest post referred to Equity-Based Crowdfunding platforms also known as the act of “Equity based Crowdfunding with a potential financial return and ownership”.  This emerging model provides very different advantages to both investors and entrepreneurs in search of capital by best aligning the interests of investors and their investments. In this model investors have exactly the same incentive as the entrepreneur – the creation of value in the company. Thereby this model allows a clean inflow and exit point as equity is tradable. Despite the legal challenges, there are already some platforms who claim to be Equity based such as www.growvc.com (via a grouping model) and www.crowdcube.com (set to launch on 10-02-2011, however UK-only). Although legal challenges make it hard for these pioneering platforms there isn’t a best practice model yet and the models currently being rolled-out remain a bit unclear.

Personally I think Crowdfunding could be the solution for the capital immobility entrepreneurs are experiencing on a global scale. Although this capital immobility could well be partly induced by the recent credit crunch, fact remains that start-ups and small and medium-sized enterprises are still experiencing problems in their capital search.

In an attempt to place Crowdfunding in the current landscape of entrepreneurial funding sources the graphic above was developed. It becomes clear that entrepreneurial Crowdfunding could be used for investments from € 20.000 euro up to € 2.5 million and could be an alternative  for or an addition to FFF-investments, bank loans, VC investments and private equity funding. I’m not advocating Crowfunding as a substitute for other means of funding but more as an additional tool to provide in a company’s capital needs. The funding itself is the main point of interest here, not the means used to acquire it! 

I’m confident to say that this yet instable state of the Crowdfunding industry will move towards a few best-practice models and we will see the rise of a few dominant platforms. In Q2 2011, www.symbid.com, will launch a Crowdfunding platform that facilitates Equity-based Crowdfunding in a more straightforward way than currently is available. Symbid facilitates the direct participation by investors in existing as well as start-up businesses without any restrictions or regional availability. 

By Korstiaan Zandvliet

Korstiaan Zandvliet holds an MSc in New Business Venturing and Entrepreneurship and has a background in Sociology and Business Administration. He is a frequent writer of expert blog articles on Social media, Crowdsourcing and Crowdfunding. After holding a position as Marketing Manager for a Dutch software start-up, he co-founded a company called Symbid. 

Symbid is a radical new innovation which enables (nascent) entrepreneurs to overcome financing problems for their start-up or small business. Symbid focuses on entrepreneurial finance needs up to € 2.5 million by utilizing the concept of Crowdfunding in a radically new way. In contrast to currently available Crowdfunding sites, Symbid developed a financial and legal framework which allows Crowdfunders to actually become a shareholder of the offered Crowdfunding propositions. For more information www.symbid.com .


dinsdag 25 januari 2011

“ Equity or Debt?” the Next Step in Crowdfunding

Last year it became clear that Crowdfunding is becoming big business. With the rise of Crowdfunding platforms all over the world, it seems valuable to take a closer look at the future of the industry and the way Crowdfunding can contribute to a healthy entrepreneurial climate. In my opinion it all comes down to what all these platforms actually deliver to project owners or nascent entrepreneurs. In these terms we can roughly define three kinds of platforms:

1. Crowdfunding as a method for sponsorship with a non-financial return
An example of such a platform is the highly successful site www.kickstarter.com , here you can pledge money to projects of your choice and in return you receive a prototype or some sort of non-financial return. The return is based upon your financial involvement in the project and is set by the project owner.

2. Debt-Crowdfunding with a financial return (P2P-lending)
Lately many P2P lending platforms are using Crowdfunding for financing debt in start-ups, although one can argue that a start-up (or actually a project that isn’t a company yet) seems to benefit from this availability of capital the opposite seems to be true. By financing a start-up project with debt it seems that irrational returns to crowdfunders are required to hedge the associated risk. This trend we do see also in platforms for micro financing, where entrepreneurs in developing countries are paying up to 1,5-2% interest per month, equaling 20% interest on a yearly basis. Thereby some platforms offer the opportunity to project owners to set interest rates themselves, offering interest returns up to 20%! Obviously a sweet prospective for potential investors, however a personal credit is cheaper and seriously how confident are you in an entrepreneur that lets his net profit be vaporized by interest payments?

3. Equity based Crowdfunding with a potential financial return and ownership
Although by many labeled as impossible due to financial regulations, this year we will see the first equity based platforms brought to market. These platforms will enable direct investments in and direct returns from new start-ups or existing companies. As return Crowdfunders become owner of the company. In comparison to Debt-Crowdfunding a far better model as it perfectly aligns interests of potential investors and the entrepreneur. Due to the multiple roles of the investors (first customers, supplier or crowdsourced human resource of the company) and the open relationship with the entrepreneur we will see the creation of the ultimate Stakeholder model.

The third category will obviously contribute to a healthier entrepreneurial climate, and could well be the solution for closing the equity gap and our drift away from the old-fashioned Shareholder model. But until that is the case, many hurdles still stand in the way of the global dispersion of these platforms. For example the latest Goldman deal (the private placement of Facebook shares) was recently pulled back and was no longer offered to US citizens due to the tremendous media attention it got. This had everything to with SEC Regulation D, stating that private placements like “the Facebook deal” cannot be the subject of advertising, general promotional seminars or public meetings in connection with the offering.

As equity based crowdfunding comes down to exactly that, the US market (still one of the most entrepreneurial markets in the world) will be a major hurdle to overcome, a hurdle that might be unable to take. However the strict SEC regulations can’t withhold the development and dispersion of equity based crowdfunding platforms and the rise of the professional social funding industry that is equity driven.

By Korstiaan Zandvliet

Korstiaan Zandvliet holds an MSc in New Business Venturing and Entrepreneurship and has a background in Sociology and Business Administration. He is a frequent writer of expert blog articles on Social media, Crowdsourcing and Crowdfunding. After holding a position as Marketing Manager for a Dutch software start-up, he co-founded a company called Symbid. 

Symbid is a radical new innovation which enables (nascent) entrepreneurs to overcome financing problems for their start-up or small business. Symbid focuses on entrepreneurial finance needs up to € 2.5 million by utilizing the concept of Crowdfunding in a radically new way. In contrast to currently available Crowdfunding sites, Symbid developed a financial and legal framework which allows Crowdfunders to actually become a shareholder of the offered Crowdfunding propositions. For more information www.symbid.com .